Will The Blockchain Be the New Database In 2015 and Beyond?

The Blockchain
The Blockchain

In an article appearing on the Startup Management website, author William Mougayar argues that the blockchain technology might radically change the way software engineers develop applications in the future. According to Mr. Mougayar, the technology behind the blockchain represents a completely different paradigm in software design. Five concepts come into play that would enable the new computing paradigm. They are the blockchain, decentralized consensus, trusted computing, smart contracts and proof-of-work/stake. These concepts will play a decisive role in developing the kind of computing structures and solutions possible in the emerging blockchain world.

It is important to pay attention because these concepts will not be restricted to computing alone. They will increasingly be used to by business, law, society and will even have potential solutions in governance itself.

Also read: Microsoft also Exploring Blockchain Technology for the IoT “World of Distributed, Connected Devices

Decentralized Consensus

The first element that Mr. Mougayar describes is the concept of decentralized consensus. Hitherto, transaction validity has been maintained through the maintenance of a single central database. In a decentralized environment, a virtual network is created through the use of nodes, and the authority to determine validity moves to this virtual network. The decentralized virtual network can record transactions on what is called a block. Each block has a hash of the previous block, and these together form the blockchain, which together with cryptography ensures that there is never a duplicate recording of the same transaction.

Under decentralized consensus, the need for a central intermediary is eliminated. It also decouples the consensus logic from the application itself giving developers the ability to write applications that can be organically decentralized.

Possibilities Offered By the Blockchain

The second concept is the blockchain itself. Any data can be stored on the blockchain semi-publicly. The blockchain enables you do that since anyone can verify that you’ve placed the information, but only you would be able to see its contents. That ability is because only you hold the private keys to the data. It is in this respect that the blockchain most resembles a database albeit for a single difference. In a database, the header is private whereas on the blockchain the hash is public.

The data that is stored on the blockchain could be a crypto-currency balance. The blockchain, therefore, acts as an alternate method of transferring value that is virtually tamper-proof due to its encryption. In the example of the Bitcoin crypto-currency, this is accomplished through the use of addresses that are 34 characters in length. The bitcoin address is public but in order to use it there will be a need for another key which is private, and which is accessible only to the owner of the bitcoin address or wallet.

To use a real-world example, we can think of a home address. We routinely include our home addresses on numerous forms and other places. However, the fact that we have made our home addresses public does not give out any information about how our homes look like on the inside.

Other Concepts that Will Expand Blockchain Use

But perhaps one concept that is likely to excite business in the next few years is the idea of smart contracts. In the context of decentralized applications such as are possible through the blockchain, smart contracts will enable two or more parties agree between themselves and bake the terms and conditions of their agreement both programmatically and conditionally through the blockchain. Other important concepts include trustless transactions which may well do away with institutions as we know them and proof-of-work which provides a hurdle big enough to prevent users from changing records or the blockchain without redoing every transactions on the blockchain.

Going into 2015, blockchain technology is going to move out of its original money-related beginnings into new ideas that may not as yet have been envisioned. And to answer the question raised in the title of the article, it [the use of the bitcoin blockchain] will change the way we interact with databases in the future. It will require the learning of new methods of programming, new approaches to contracts, business processes and even governance itself. The onus, therefore, is on professionals to begin moving into the emerging brave crypto world.

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